Rana v. Youxin Gu
| Decision Date | 14 November 2016 |
| Docket Number | No. C 16–05589 WHA,C 16–05589 WHA |
| Citation | 220 F.Supp.3d 989 |
| Parties | Kashif RANA and Saima Anjum, Plaintiffs, v. Youxin GU a/k/a Cindy Gu and J. C. Invest Group, Inc., Defendants. |
| Court | U.S. District Court — Northern District of California |
Thomas Philip Zito, Diana Elizabeth Castillo, Kyra Ann Kazantzis, Law Foundation of Silicon Valley, San Jose, CA, for Plaintiff.
ORDER GRANTING PRELIMINARY INJUNCTION
In this housing discrimination action, plaintiffs move for a preliminary injunction preventing their landlord from proceeding with eviction. For the reasons stated below, plaintiffs' motion is GRANTED .
Plaintiffs Kashif Rana and Saima Anjum live with their minor children in a home in Fremont, which they rent from defendant Youxin Gu (also known as Cindy), in her capacity as president of defendant J. C. Invest Group, Inc., the manager of the property. In June 2015, Rana signed a one-year lease with Gu. The lease converted to month-to-month in June 2016. The lease provided that once it had converted to a month-to-month agreement, the owners needed to give notice of at least thirty days for any changes to the terms of tenancy, including termination or rent adjustments (Rana Decl., Exh. 1).
Plaintiffs researched licensing requirements and decided to pursue a license to operate a family day-care home.
On July 10, 2016, Rana contacted Gu via text message to seek permission for Anjum to operate a small day-care center in her home. Gu refused to assent, expressing concerns about liability. Rana quickly followed up to state that Gu would have no liability whatsoever. Gu continued to refuse writing, (id. , Exh. 2).
In fact, California law voids any restriction the use of property for a "family day-care home" for six or fewer children, provided notice is given to the property owner. See Cal. Health & Safety Code §§ 1597.40(c), 1597.44. Later in the day on July 10, Rana sent an email to Gu stating that he and his wife did not need Gu's permission to start a family day-care center, provided it serviced six of fewer children. The email included a link to a website containing information about the legal issues surrounding family day-care centers (id. , Exh. 3). Gu responded by serving a notice to terminate tenancy dated July 17. The notice gave plaintiffs until September 19 to vacate the premises (id. , Exh. 4).
On July 27, out of fear of eviction, Rana informed Gu via text message that he and Anjum had canceled their plans to operate a home day-care center. Gu did not respond. On August 3, Rana followed up with Gu, restating that he and Anjum had canceled their plans and asking Gu to rescind the termination notice.
On August 4, Rana contacted Project Sentinel, a fair housing organization, which sent a demand letter to Gu on Rana and Anjum's behalf (on August 9). That letter implored Gu to rescind the termination notice (Pan Decl., Exh. 2).
On August 10, Gu contacted Rana and thanked him for responding to the termination notice. Nevertheless, Gu stated, "[a]t this time, we want our property back" and warned that a new termination notice would issue. The notice gave plaintiffs until October 12 to vacate the premises (Rana Decl., Exhs. 6–7).
Project Sentinel referred Rana to the Law Foundation of Silicon Valley, which wrote another demand letter to Gu on September 7, setting a deadline to respond of September 16 (Castillo Decl., Exh. 2). On September 19, Gu directed Rana, via email, to continue to pay rent through October 12 (Rana Decl., Exh. 8). The same day, counsel for Gu informed counsel for plaintiffs that the termination notices would not be rescinded. The letter from defense counsel stated, for the first time, that our plaintiffs were being evicted for a reason unrelated to the day care, as follows (Castillo Decl., Exh. 3):
The subject premises was built in 1963 and is not in a very good condition. When Ms. Gu purchased the premises in 2008, she conducted a brief remodeling. At that time, the contractor suggested to replace all electrical wires due to the old age thereof. However, Ms. Gu did not have sufficient funds to proceed with the project. After confirming with the contractor that the existing wires were safe, Ms. Gu decided to defer the replacement. In addition, previous tenants ever [sic] reported plumbing blockage which turned out to be sewer line damages caused by tree roots. Since the premises was occupied, the contractor could only clean the sewer line as a temporary remedy. The tree roots still need [to] be treated sooner or later. In order to increase the value of the premises and make it more comfortable for the tenants, Ms. Gu thought about an extensive renovation a long time ago.
The letter further contended that Gu served the second termination notice because she believed the first was defective and that it was not a response to the letter from Project Sentinel, notwithstanding its service just two days after the letter was sent. (Counsel stated that Gu did not receive that letter until after issuing the second notice.) Finally, the letter stated that plaintiffs remained welcome to reapply for a new lease when the renovation is finished, even if they'd like to resume their plan for an in-home day-care center.
On September 22, plaintiffs' counsel responded with an offer to resolve the dispute as follows (id. Exh. 4):
[I]f Ms. Gu rescinds the notices of termination that she issued and so advises me in writing of this; accepts full rent for October, 2016; provides me with copies of all inspection reports, proposals for repair, and any related permits or permit applications that she has obtained for the premises; and agrees to cease interfering with my clients' application for and operation of a family day care by 5 p.m. on Monday September 26, 2016, then my clients will agree to develop and enter into an agreement with Ms. Gu under which they agree to temporarily move out of the premises for the time of the anticipated repairs.
After further exchange, defendants did not alter their position and maintained that plaintiffs would need to vacate the premises on October 12. On September 27, plaintiffs' counsel informed defense counsel that they would be forced to pursue legal action. Hours later, Gu advised Rana that she wanted to send a contractor to inspect the home seeking to arrange a time. The inspection occurred on October 1 (Rana Decl. ¶¶ 20–21, Exh. 11).
Plaintiffs commenced this action claiming violations of various state and federal prohibitions on discrimination on September 30, and made an ex parte application for a temporary restraining order on October 5. An order set a hearing on the motion for the following day and required plaintiffs to serve defendants. At the hearing, at which counsel for both sides (and Gu herself) appeared, the parties agreed to a temporary restraining order maintaining the status quo. Specifically, defendants were enjoined from terminating plaintiffs' tenancy until the Court could determine whether a preliminary injunction should issue and plaintiffs could not operate a home day-care center in that intervening time. Plaintiffs were also required to allow defendants to access the premises to make preparations for renovations upon reasonable notice (Dkt. No. 24).
That order set a hearing and briefing schedule to determine whether a preliminary injunction should issue. This order follows full briefing and oral argument.
Plaintiffs seeking a preliminary injunction must satisfy the following four factors: (1) they are likely to succeed on the merits, (2) they are likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of the equities tip in their favor, and (4) an injunction is in the public interest. Farris v. Seabrook , 677 F.3d 858, 864 (9th Cir. 2012) (citing Winter v. NRDC , 555 U.S. 7, 20 (2008)).
The California Fair Employment and Housing Act prohibits property owners and operators of property from discriminating against any person on the basis of "race, color, religion, sex, gender, gender identity, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information...." Cal. Gov. Code § 12955(a). Terminating a lease on a prohibited basis constitutes discrimination. Cal. Gov. Code § 12927(c)(1). The California Court of Appeal has recognized that discrimination on the basis of operating a family day-care constitutes source-of-income discrimination. Sisemore v. Master Financial, Inc. , 151 Cal.App.4th 1386, 1416–17, 60 Cal.Rptr.3d 719 (2007). It has also recognized that discrimination on that basis may have a disparate impact on women or families with children. Id. at 1423, 60 Cal.Rptr.3d 719. An unpublished federal district court decision also acknowledged the viability of a discrimination claim on this theory under both federal and state law. Vance v. Bakas , No. 05–3385 (Judge Patricia Trumbull), 2006 WL 496053, at *4 (N.D. Cal. Mar. 1, 2006). Defendants do not dispute that an adverse housing decision based on plans to operate a family day-care center can constitute illegal discrimination under federal or state law. This order need not resolve that question conclusively but accepts at this stage that plaintiffs are likely to succeed on that point.1
Discrimination under state and federal law may be shown by direct or indirect evidence pursuant to the burden-shifting framework set forth by the Supreme Court in McDonnell Douglas Corp. v. Green , 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). See Dep't of Fair Employment and Hous. v. Superior Court , 99 Cal.App.4th 896, 902, 121 Cal.Rptr.2d 615 (2002). Under that framework, a plaintiff must show (1) they are a member of a protected class, (2) they suffered adverse treatment with regard to housing, and (3) membership in the protected class was in part a motivating factor for the adverse treatment. Harris v....
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